AI Takeaway
DraftKings achieved its first profitable Q1 in recent history, posting $21.1M net income on $1.65B revenue (+16.8% YoY) as operating leverage finally turned positive with a $5.8M operating income versus a -$46.3M loss a year ago.
Revenue
$1.65B
++16.84% YoY
EPS (Basic)
$0.04
++157.14% YoY
Operating Income
$5.85M
++112.62% YoY
Filed · Source: SEC EDGAR 10-Q filing
Revenue grew 16.8% YoY to $1.65B in Q1 2026 from $1.41B in Q1 2025, reflecting continued customer acquisition and higher handle volumes across DraftKings' sportsbook and iGaming platforms.
Source: Source: 10-Q Income Statement
Operating income turned positive at $5.8M compared to a -$46.3M operating loss in Q1 2025, representing a 112.6% YoY improvement and signaling meaningful operating leverage as revenue scales faster than costs.
Source: Source: 10-Q Income Statement
Cost of revenue grew 12.5% YoY to $949.4M, slower than the 16.8% revenue growth rate, implying gross margin expansion and improving unit economics as the business scales.
Source: Source: 10-Q Income Statement
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Upgrade to unlockDraftKings carries a debt-to-equity ratio of 6.12x with $3.70B in total liabilities against only $605M in equity. This elevated leverage limits financial flexibility and increases vulnerability to rising interest rates or revenue shortfalls.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockReported EPS of $0.03 versus the $0.01 analyst consensus — a +229.7% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.65B | $1.41B | +16.84% |
Cost of Revenue | $949.38M | $843.8M | +12.51% |
Operating Income | $5.85M | $-46.33M | +112.62% |
Net Income | $21.07M | $-33.86M | +162.22% |
EPS (Basic) | $0.04 | $-0.07 | +157.14% |
EPS (Diluted) | $0.03 | $-0.07 | +142.86% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $4.31B | $4.52B | -4.61% |
Current Assets | $1.58B | $1.8B | -12.39% |
Total Liabilities | $3.7B | $3.64B | +1.64% |
Current Liabilities | $1.55B | $1.5B | +3.31% |
Stockholders' Equity | $605.05M | $872.91M | -30.69% |
Cash & Equivalents | $999.4M | $1.12B | -10.75% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $-48.44M | $-119.02M | +59.30% |
Investing Cash Flow | $-48.21M | $-39.02M | -23.56% |
Financing Cash Flow | $-121.13M | $372.82M | -132.49% |
Share Buybacks | $98.64M | $142.28M | -30.67% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 0.4% | -3.3% | +3.64% |
Net Margin | 1.3% | — | — |
ROE | 3.5% | — | — |
ROA | 0.5% | — | — |
Current Ratio | $1.019 | — | — |
Debt to Equity | $6.119 | — | — |
Yes, DraftKings reported its first profitable Q1 with net income of $21.1M in Q1 2026, compared to a net loss of -$33.9M in Q1 2025. Operating income also turned positive at $5.8M versus -$46.3M a year ago, marking a significant milestone for the company.
The key takeaways are: revenue grew 16.8% YoY to $1.65B, net income turned positive at $21.1M, and operating margin flipped from -3.3% to +0.36%. However, operating cash flow remains negative at -$48.4M and the debt-to-equity ratio is elevated at 6.12x.
DraftKings grew revenue 16.8% YoY to $1.65B in Q1 2026, up from $1.41B in Q1 2025. Importantly, cost of revenue grew at a slower 12.5% pace, suggesting improving gross margins and better unit economics as the platform scales.
DraftKings' financial health shows improvement but remains a work in progress: the company has $999M in cash, a current ratio of just 1.02x, and a high debt-to-equity of 6.12x. Operating cash flow is still negative at -$48.4M, though it improved significantly from -$119M a year ago.
Yes, DraftKings repurchased $98.6M in shares during Q1 2026, down from $142.3M in Q1 2025. These buybacks contributed to a 30.7% YoY decline in stockholders' equity to $605M and a reduction in cash balances to $999M.